Freedom Financial Network Funding is returning to sponsor a $263.3 million securitization of proceeds from unsecured consumer loans under the bran of its parent company, Achieve.
The current deal, ACHV 2024-2PL, comes to market as one of Achieve's other subsidiary companies, Freedom Consumer Credit Fund, has a $75 million revolving warehouse facility dedicated to a home equity line of credit product, according to Kroll Bond Rating Agency. Jeffries is a co-sponsor of the deal, according to DBRS Morningstar.
Among the deal's other key changes, transaction also has a loan pool with a higher average loan balance, higher weighted average FICO score and a significant increase in loans in its FRG 1 risk grade, KBRA said. Slightly more than 40% of the portfolio is in that tier, compared with about 31% on the ACHV 2024-1PL, the rating agency said. Only loans from the Achieve Personal Loan product line are in the current collateral pool, the rating agency said.
The transaction will issue notes through four tranches of classes A, B, C and D notes, all of which have an Oct. 27, 2031 legal final maturity date, KBRA said. Cross River Bank or Pathward, National Association originated all loans in the pool. Freedom Financial Asset Management will service the loans in the deal, according to the rating agency.
ACHV 2024-2PL will repay principal to noteholders sequentially, beginning with the class A notes until they teach a target, at which point principal will then be paid to the next subordinate class, the B notes. The trust will repeat the process until the notes are paid in full.
The notes will benefit from several forms of credit enhancement, including overcollateralization starting at a level representing 14.70% of the pool balance, KBRA said. That will build to a target of 21.70% as the notes amortize. There is also a cash reserve account that starts at 0.0% of the pool balance, but will build to a target equaling 0.50% of the current pool balance.
Also, gross excess spread before losses is about 12.56%, KBRA said.
KBRA assigns AAA, AA-, A- and BBB- to classes A, B, C and D notes, respectively. DBRS, meanwhile, assigns ratings of AAA, AA and A to classes A, B and C.
